Products Pipelines - Kinder Morgan

ENERGY PARTNERS, L.P.Fundamental Demand Drivers in Place Demographics of Markets Served⎯ Population Growth⎯ Urban Congestion⎯ Suburban Spread Price/Demand Modest Inroads of Hybrids/Alternative Fuel Vehicles⎯ % of Hybrids on Road⎯ U.S. Fleet Turnover Biofuels Present Additional Opportunities⎯ Storage⎯ Blending/Injection⎯ Pipeline Transportation2

ENERGY PARTNERS, L.P.Price Projections3

ENERGY PARTNERS, L.P.Price/Demand10,000$2.509,0008,000$2.007,000US Motor Gasoline FinishedSupplied (000's BPD)6,000$1.505,0004,0003,000$1.00US Annual Retail SalesAverage Price (cents pergallon)2,000$0.501,00001994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006$0.004

ENERGY PARTNERS, L.P.Expanding and Acquiring to Meet Market DemandExpansion Projects UnderwayProject Description In Service Cost ($MM)PacificFresno Terminal Expansion 1- 80MB tank & 2 lane truck loading rack 2008 $11.0Colton Terminal Expansion 2 - 80MB tanks 2008 $8.5Miramar Expansion 2 - 80MB tanks & pump/meter station 2008 $15.0East Line Expansion II (EPX) 140 mi pipeline, pump station and storage 2007 $145.0$179.5CalnevLas Vegas Terminal Tankage Expansion 2-80MB tanks 2007 $7.5Cajon Booster Station Pumps 2007 $14.6Las Vegas Terminal Loading Rack Expansion Truck loading rack upgrade 2007 $1.6Calnev Pipeline Expansion 16" pipeline 2010 $388.0$411.7CFPLPipeline/Tank Projects Complete Pipeline capacity expansion and new tank 2007 $6.1Tampa Airport Project New tank and pipeline to airport 2008 $25.0$31.1KMSTRoanoke, VA Motiva Terminal Acquisition $6.8$6.8TOTAL $629.15

ENERGY PARTNERS, L.P.East Line ExpansionProject currently under way to expand the El Paso to Phoenix/Tucson East Line El Paso to Phoenix Expansion – $145 MM cost with estimated completiondate in Q4 2007⎯⎯⎯⎯127 miles of looped 16” pipeline from El Paso to Tucson13 miles of 12” gathering lineAdditional breakout tanks at TucsonShould satisfy market demand for 8-10 years depending on growth assumptions Further incremental East and West line Expansions to Meet FutureDemand⎯⎯Horsepower (East / West Line)Phoenix Manifold Debottlenecking (West Line)6

ENERGY PARTNERS, L.P.East Line ExpansionCURRENT8" / 12" / 8" NEW12"PX TU 12" / 16" / 12" TANKFARM16”DJ8"12" EPEXPANSIONNEW 16" DJP/S12"16"8"PX TU TANK12" EPFARM7

ENERGY PARTNERS, L.P.Calnev ExpansionSeveral projects to expand the Calnev pipeline system2006 - $23.7 MM in total approved projectsLas Vegas Terminal Expansion⎯⎯Provide additional 160,000 Bbls of tankage for gasoline, diesel, and ethanolOptimize storage of product slate⎯ Completion February 2007Cajon Booster, CA – provides approximately 9% additional capacity on the 14” mainline( 143 B/D - 156 B/D)Las Vegas Loading Rack Upgrade – additional capacity & faster loading ratesMajor Mainline Projects⎯⎯16” Pipeline from Colton, CA to Las Vegas, NVEstimated cost: $388MM⎯ On line 2010⎯⎯Initial capacity of 200 B/D. Further horsepower expansions take capacity to 300 B/D.Seeking tariff rate certainty8

ENERGY PARTNERS, L.P.Military ExpansionsNellis AFB, NV – $10.9 MM⎯ 5.3 miles of 8” pipe⎯ 20 MB storage tanks and filtration⎯ In-service August 2006Miramar, CA Station - $15 MM⎯ Provides 160,000 Bbls of tankage for JP-5 & Marine Diesel⎯ Delivery pump and metering facilities⎯ Expected in-service late 2008Fuel Filtration Projects⎯ 5 Bases⎯ $5.6M Capital Cost⎯ Awaiting DESC approval9

ENERGY PARTNERS, L.P.Tampa PipelineProject descriptionConstruct 9 mile 8” pipeline from KM Tampa Terminal to Tampa International Airportand install 120k bbl jet fuel tank – total project cost $25 millionStart-up expected 18 months from execution of agreement with airline consortiumBusiness driversConsolidate major Central Florida airlines fuel supply operations at KM TampaTerminalAccommodate future growth with increased independence for airlines in fuelpurchasingCommercial terms20 year volume commitment from airline consortiumRates indexed annually to CPI (3% minimum/5% max)10

RENEWABLE FUEL OPPORTUNITIES(Ethanol & Biodiesel)ENERGY PARTNERS, L.P.2006 Mandate⎯ 4 Billion Gallons = 95 Million Barrels = 261,000 Barrels Per Day2012 Mandate⎯ 7.5 Billion Gallons = 179 Million Barrels = 490,000 Barrels Per DayStrong political support for increased biofuels mandates⎯ California Low Carbon Fuel Standard⎯ Congressional initiatives⎯ Governor’s ProposalsHow will mandates be met?⎯ Corn / cellulosic / imports / biodieselWhat blend rates?⎯ Ethanol 5.7% / 10% / 85%⎯ Biodiesel B-5 / B-10 / B-20Influence of automobile/truck manufacturersWhich areas are more likely to switch and at what blend rates?11

ENERGY PARTNERS, L.P.Renewable Fuel Opportunities (Continued)Logistics Challenges⎯ Sources of supply⎯ Gathering of supply⎯ Truck/rail/dedicated pipelines⎯ Impact of blend rates on logistics (E-10 vs. E-85 volumes)− Transportation− Storage⎯ Demand Issues⎯ Concentrated in large urban areas or diffused across states⎯ Impacts to storage and product distribution⎯ Kinder Morgan Biofuels Team− Natural Gas, Pipelines, Terminals12

California’s Proposed Low CarbonFuel Standard (LCFS)ENERGY PARTNERS, L.P. 40% of California Green House Gas (GHG) Emissions fromTransportation Sector Reduce carbon intensity of California passenger vehicles by atleast 10% by 2020 Analyze on “well to wheel” or “field to wheel” basis Performance Based (allows averaging, banking and trading toachieve lowest cost and consumer responsive solutions) Fuel neutral (fuel providers to choose which fuels to sell and inwhat volumes) Implement program by year-end 200813

ENERGY PARTNERS, L.P.California’s Proposed Low Carbon Fuel StandardPOSSIBLE LOW CARBON STRATEGIES E-10 Increase Blend from E-6 to E-10 E-85 Sell high blend (85% ethanol/15% gasoline) foruse in Flex Fuel Vehicles Increased use of Low Carbon Ethanol-CellulosicEthanol (switchgrass/agricultural waste) has 4 to 5times less carbon content than corn-based ethanol Hybrid/AFV’s Logistics Implications14

ENERGY PARTNERS, L.P.California’s Proposed Low Carbon Fuel StandardE-10 TRANSITION 2006 Kinder Morgan California Ethanol Volumes Adjusted to proposed 10% Blend Rate⎯ 75% increase in ethanol volumes274.7 million gallons / 17.9 B/D482.1 million gallons / 31.4 B/D Will require permit modifications and some additional infrastructure(offloading facilities and tanks at some locations) Terminal vs. Pipeline Revenues⎯⎯Non-jurisdictional vs. jurisdictional serviceLower power costs15

ENERGY PARTNERS, L.P.California’s Proposed Low Carbon Fuel StandardOTHER ETHANOL OPPORTUNITIES Full year blending in Arizona/Las Vegas Other markets should mandate expand⎯ Atlanta⎯ Birmingham⎯ Charlotte⎯ Greensboro⎯ Tampa/Orlando⎯ Portland, OR⎯ Seattle, WA16

ENERGY PARTNERS, L.P.Renewable Fuel Opportunities – BiodieselMost Engine Manufacturers Honor Engine Warranties With Biodiesel Blends of 5% or LessPlantation Pipe Line December 13, 2006 Press Release⎯Evaluating the possibility of transporting B5 to B20 from BatonRouge, LA to Greensboro, NC January 9, 2007⎯Distributed survey to customers to determine interest in transportingB5 to B20 Biodiesel (Pending Test Batch) Issues Under Review⎯Trail Back Concerns, Cold Flow Concerns & Infrastructure17

ENERGY PARTNERS, L.P.Cochin AcquisitionCurrently owned 50.2% BP / 49.8% KMwith BP as operator1900 mile natural gas liquids pipeline, 5propane terminalsHistorically, has also moved ethane andethylene to chemical plants in Sarnia,OntarioBP to provide 5 year volume commitmentFort SaskatchewanEdmontonCalgaryCochin Pipe Line SystemReginaRichardsonCarringtonBensonMankatoMapco WestNew Hampton ConwayCochin EastClintonMilfordWhiting/GriffithSarniaWindsorAnticipated Closing late 1Q07 Due Diligence Regulatory ApprovalsHobbsMount Belvieu Effective Date 1/1/200718

ENERGY PARTNERS, L.P.Plantation Pipe Line Company2006 Volume Impacts Volumes 6.7% below 2005 volumes (555 B/D vs. 595 B/D) ULSD Product Supply MTBE Elimination and RBOB Phase-in Bengal Pipeline Impact (Shell-CPC Joint Venture) Loss of volumes from origins of Motiva-Norco & Valero-St.Charles Connections were unavailable for a period of three months2007 Opportunities Refineries that were still impacted by 2005 hurricanes have now returned to normal production Expanded Pipeline Capacity from Pascagoula, MS Expanded Pipeline Capacity to Montgomery, AL New refinery connection (Motiva-Convent) New incentive to recapture Bengal volumes (effective 12/06) ULSD Spec Change (8 ppm – 10 ppm)Beyond 2007 Announced refinery expansions will significantly increase supply in future years Marathon-Garyville +180,000 B/D Crude capacity Chevron-Pascagoula +18,000 B/D Gasoline capacity19

ENERGY PARTNERS, L.P.2007 Product Pipeline PlanPipeline Volumes – Million BarrelsPipeline Revenues - $million (a)2007 Plan2006 ActualPercent2007 Plan2006 ActualPercentChangeChangePacific449.3433.73.6%379.9359.15.8%Calnev52.250.53.4%71.065.68.2%Plantation207.0202.62.2%188.4177.56.1%CFPL42.740.74.8%46.943.18.7%Heartland8.68.34.0%8.47.78.6%Total759.8735.83.3%694.5653.16.3%__________________________(a) Includes associated terminals20

Historical FERC Tariff Index RegimeStartCurrentPPI FG – 1(1995 - 1999)PPI FG(2000 – 2005)PPI FG + 1.3%(2006 - 2010)Effects of Indexing on Tariff of $1/Bbl in 1994Index Year Multiplier Index Value $1 tariff Basis$1.000January 1, 1995 to June 30, 1995 1.002175 0.22% $1.002 PPI - FG - 1%July 1, 1995 to June 30, 1996 0.996415 -0.36% $0.999 PPI - FG - 1%July 1, 1996 to June 30, 1997 1.009124 0.91% $1.008 PPI - FG - 1%July 1, 1997 to June 30, 1998 1.016583 1.66% $1.024 PPI - FG - 1%July 1, 1998 to June 30, 1999 0.993808 -0.62% $1.018 PPI - FG - 1%July 1, 1999 to June 30, 2000 0.981654 -1.83% $0.999 PPI - FG - 1%July 1, 2000 to June 30, 2001 1.007598 0.76% $1.007 PPI - FGJuly 1, 2001 to June 30, 2002 1.037594 3.76% $1.045 PPI - FGJuly 1, 2002 to June 30, 2003 1.019565 1.96% $1.065 PPI - FGJuly 1, 2003 to June 30, 2004 0.987207 -1.28% $1.052 PPI - FGJuly 1, 2004 to June 30, 2005 1.031677 3.17% $1.085 PPI - FGJuly 1, 2005 to June 30, 2006 1.036288 3.63% $1.124 PPI - FGJuly 1, 2006 to June 30, 2007 1.061485 6.15% $1.193 PPI - FG + 1.3%July 1, 2007 to June 30, 2007 4.25%* $1.249* PPI - FG + 1.3%*Estimated21

ENERGY PARTNERS, L.P.FERC UpdateDecember 16, 2005 FERC Order⎯Addressed issues on remand of BP West Coast Products decision(OR92-8 cost of service issues)⎯⎯Applied FERC Income Tax Allowance Policy Statement to SFPP cases (OR92-8/OR96-2)Reviewed OR96-2 Phase 2 cost of service rulings of Administrative Law JudgeKey Outcomes⎯⎯⎯Ruled favorably on SFPP’s ITA consistent with Policy StatementReversed or modified a number of adverse cost of service determinationsUpheld its prior rejections of challenges to SFPP’s indexing adjustments⎯ SFPP made compliance filing in March and filed new rates to take effect May 1, 2006⎯All Parties filed appeals with D.C. Court of Appeals (grandfathering and ITA)⎯ Oral Argument held December 12, 2006Key Issues⎯⎯Grandfathering of West LineIncome Tax Allowance⎯ Expect appellate decision late 1Q or early 2Q ’07Reserve⎯ Established reserve of $105 million in 200522

ENERGY PARTNERS, L.P.What’s Next?If D.C. Circuit agrees with SFPP appeal on grandfathering, likely outcome isvacation and remand to FERC.⎯⎯⎯If SFPP prevails at FERC, eliminates basis for reparations in OR96-2If West Line reparations paid prior to such decision, SFPP could seek to recover reparationsfrom shippersInterim West Line rates lowered on May 1, 2006 could be restored to previous grandfatheredlevels and a surcharge implemented prospectively to recover reduced revenuesD.C. Panel’s Assessment of Income Tax Allowance (Oral Argument)⎯ “Ripeness” Issue re Policy Statement⎯ Concerns about phantom tax at entity level⎯ Recognition of investors’ return expectations and that taxes are ultimately paid⎯ Suggestion to adjust pre-tax returns on equity⎯ Remand vs. reverse/render23

ENERGY PARTNERS, L.P.